Apple and Google Face Growing Revolt Over App Store ‘Tax’

First we’d spend hundreds of thousands of dollars printing manuals and boxes, and duplicating disks. If the release sold well, that would end up costing us less than $10 per unit. If it didn’t sell well, that cost would approach 100% of revenues.

Next, we would neec need to find a way to get our boxes of software into actual stores. The easiest way was to convince someone like Ingram MicroD to distribute our software. Once stocked with Ingram, any store could order our product! That doesn’t mean they did though.

So the next step is to convince stores to stock us. We could hire and send sales staff, or we could pay Ingram to advertise us prominently in their catalogs, or we could even pay big chains to stock us in prominent locations called “end caps”!

Now all we had to do was wait for the money to roll in! And wait was the key phrase, cause even though our contract said 30 day terms, Ingram days were kind of like their version of dog years, or better yet Elon schedules, where everything takes at least twice as long. After 45 days you’d call one Monday, and they’d say oh we don’t cut checks on mondays, only on Fridays. So you call on Friday to find they only cut checks in Wednesdays! Then the next time the darn CFO would be out of town, you can’t get checks signed without the CFO you know. But no worries, Ingram always paid, never in thirty days but usually within 6 months or so.

And they did all of that for “only” a 50% cut of our revenues!

Developers today don’t know how good they have it. For only 30% of revenues (and a $99 annual dev fee) Apple will give you as many marketing pages as you want in their store, will host your apps, and no matter how big they are or how often you update them, and irregardkess of how many download them, Apple pays for all storage and bandwidth costs.

And you not only have access to North American customers, but Apple has international stores localized in dozens of languages you get free access to at the click of a mouse. Do a Spanish version of your app and it’s in dozens of stores for Spanish speaking countries in hours.

And on top of that, Apple provides probably the best payment processing system known to man. It’s easy to sell for one time chatgesmp, subscriptions, by feature, etc. and customers are super comfortable with the App Store because it makes managing their subscriptions or canceling unwanted purchases is super easy.

And even better, Apple tightly vets every app and every update before releasing, which is a big reason why it’s the biggest selling App Store in the world. Customers feel safe downloading your apps from the Apple App Store, which helps sell more if them.

Apple paid developers over $20B the last year. There hasn’t been a software market this lucrative and this easy to get into in the history of the world.

Android is obviously a larger ‘strategic’ play so I would argue that should be excluded and Google Play Services are also likely to either be ‘strategic’ plays (ie Apple offers music, so do we; Customers want movies, let’s offer them too, etc) or potentially revenue positive.

If Google’s and Apple’s accountants can setup magical tax systems across the world - they could also provide some useful data points about the true costs of running their App stores.

As a specific example, I’d be interested to know, what the hosting and bandwidth costs are for the App Stores (likely heavily subsidised given both Apple and Google run cloud platforms including hosting).

At the moment, there is next to no transparency except the “30%” cut and some high-level info in their quarterly financial reports.

Wait, are they going after Apple too? Or are they ok because they've locked down their platform 99.999% (assuming there's still some jailbroken ones out there)?